Paycheck Chronicles

Start Young When Talking About College Costs

It's college application and admissions time, and people are abuzz with what colleges their kids are applying to and what colleges have accepted their kids. And, of course, what they can and can not afford. And there are a couple of disturbing trends that I have heard in these conversations.

  • How Do I Tell My Child I Can't Afford Their Dream School
  • It's Only $30,000 In Loans Per Year
  • We'll Just Stop Contributing To Retirement/Refinance Our House/Take Out A Loan

I'm not going to talk about how to solve these actual problems because a) it is too late and b) not my circus, not my monkeys. But I can offer some serious advice for those of you who haven't made it to this stage of the process yet. And it pretty much comes down to one thing:

Have honest conversations with your kids before you get to the admissions stage of the process.

It's hard, I know. I'm not even sure we did a great job with our first two, and our third child "doesn't want to talk about it." And life is busy and there are so many other things to deal with, so it seems easier to wait to have these conversations until your child knows their choices.

There are a couple of problems with this plan.  The main problem is that by the time your child has gotten to the "acceptance" stage of the process, they are emotionally invested in the outcome. (And, quite likely, they are just emotional altogether at that point.) As we all know, emotions and money are often a bad combination.

Which brings me to the subsidiary piece suggestion: Discourage the idea of a dream school or a first choice.

Every child is different, but it is pretty rare that one university is significantly better for accomplishing your child's long-term goals. Having a single "best" makes it significantly harder to make smart financial decisions when those financial aid packages come in and you are comparing offers.

College can be expensive, and families have to make hard choices about how to pay for it. Setting up realistic expectations before your child starts applying will prevent a lot of drama and internal strife during the already hardest part.

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